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Falling Mortgage Rates Are Enticing U.S. Homebuyers to Trade Up

  • Average loan size is growing as 30-year rate drops below 4%
  • Cheaper loans only add to competition for scarce low-end homes
People look at a home for sale during an open house in San Francisco.

People look at a home for sale during an open house in San Francisco.

Photographer: Justin Sullivan/Getty Images North America

This year’s plunge in mortgage rates is giving Americans an incentive to upgrade to pricier houses.

Take loan officer Clint Gerke’s client in Salem, Oregon. The single mother is just fine with her current home. But she’s selling anyway so she can look for something better. Her motivation? Gerke offered her a 30-year mortgage with a rate of less than 4%.